SRF (SRF) Q4 98/99 earnings summary

Executive summary

• FY1998-99 sales rose to Rs 689.63 crore from Rs 675.81 crore; PBIDT before foreign-exchange movements was nearly flat at Rs 165.55 crore.

• Cost control, working-capital reduction and financial restructuring helped offset lower selling prices; profit after tax was Rs 13.53 crore.

• Core businesses maintained market leadership or share, while polyester films staged a production and sales rebound.

Financial highlights

• Gross sales were Rs 689.63 crore, up from Rs 675.81 crore; exports increased 35% to Rs 79.43 crore from Rs 59.07 crore.

• PBIDT before foreign-currency fluctuation was Rs 165.55 crore versus Rs 165.23 crore; after a Rs 7.41 crore FX loss, PBIDT was Rs 158.14 crore versus Rs 166.91 crore.

• PBT was Rs 15.08 crore versus Rs 3.77 crore; PAT was Rs 13.53 crore versus Rs 3.31 crore.

• Interest expense fell to Rs 106.45 crore from Rs 130.27 crore; depreciation was Rs 49.68 crore versus Rs 48.11 crore.

• Cost-reduction and profit-improvement programs saved Rs 13.9 crore; working capital fell a further 16% in FY1998-99.

Outlook and guidance

• 1999-2000 priorities: build people and process capabilities through DM-98 and SYSTEM-2000, improve fixed-cost competitiveness, further consolidate finances, divest non-core businesses, and pursue growth through debottlenecking and acquisitions.

• India GDP growth for 1999-2000 was forecast at ~5%; management expected margins to remain pressured by cheaper imported nylon tyre cord fabric and higher raw-material costs.

• Y2K systems checks and remediation were targeted for completion by September 1999; a company-wide compliance audit was expected by August 1999.